Firms from both countries may be involved in the scam.

Vietnamese authorities are investigating information from the European Anti-Fraud Office (OLAF) over claims that Chinese steel firms have been tagging Vietnamese labels on their products to by-pass anti dumping tariffs in Europe.

OLAF said that about 190 shipments of rolled steel products worth approximately $19 million were exported to Europe from 2013 to 2014 with Vietnam’s Certificate of Origin (C/O) issued by the Vietnam Chamber of Commerce and Industry (VCCI), according to the Ministry of Industry and Trade’s newspaper.

The European office suspects some of these products originated from China and were exported to Vietnam before being shipped to Europe to escape anti-dumping measures that the E.U. imposes on items from China.

Chinese steel products may have been stamped with Vietnamese certificates to escape high anti-dumping tariffs. Photo from baocongthuong.com.vn

Due to their low cost and high volume, Chinese steel products have a huge impact on steel production in numerous countries, including Vietnam. The E.U. and other countries impose tariffs on steel from China to protect their domestic markets.

The American Chamber of Commerce decided to impose an anti-dumping levy of 265.76 percent and an anti-subsidiary tariff of 256.44 percent on Chinese steel in May 2016. More recently on July 29, Europe also approved high anti-dumping measures against Chinese bar steel products.

Chinese steel with a Vietnamese tag on it escapes these huge tariffs, but Vietnamese enterprises could be under investigation and lose their reputation on the global market.

Vietnam has run into difficulties with steel exports in recent years, and six anti-dumping investigations have been launched by other countries.

The Vietnam Competition Authority under the Ministry of Industry and Trade is working with commercial departments in the E.U. along with Vietnam Customs and other VCCI departments to investigate and verify the allegations.